exv10w7






Exhibit 10.7




[***] DENOTES CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR

CONFIDENTIAL TREATMENT









FUEL SALES AND LICENSING AGREEMENT




between



ALON BRANDS, INC.



and



ALON USA, LP



 









 





FUEL SALES AND LICENSING AGREEMENT




          This Fuel Sales and Licensing Agreement (this “Agreement”) is made and entered into this
1st day of November 2009, by and between Alon USA, LP, a Texas limited partnership
(“Alon”), and Alon Brands, Inc., a Delaware corporation (“Brands”).




WITNESSETH:




          FOR AND IN CONSIDERATION of the premises, Alon agrees to sell and Brands agrees to purchase
and accept the products specified herein upon the terms and conditions contained in this Agreement.




RECITALS




     A. Alon has an exclusive license to use certain trademarks (the “Fina Marks,” as identified on
the attached as Exhibit A and as thereafter modified, amended or replaced) in connection with the
manufacture and sale of gasoline and diesel fuel in the States of Texas, Oklahoma, New Mexico,
Arizona, Arkansas, Louisiana, Colorado and Utah (collectively, the “Licensed Territory”) under the
terms of a certain Trademark License Agreement dated to be effective as of July 31, 2000, by and
between Finamark, Inc. and Atofina Petrochemicals, Inc. as Licensor (the “Primary Licensors”), and
SWBU, L.P. (now known as Alon USA, LP) as Licensee (the “Master License Agreement”), until 2012 or
as long as Alon continues to manufacture and sell certain products under the Fina Marks in said
territory, whichever period is shorter. Alon does not own the Fina Marks. Alon’s exclusive
license includes a right to sublicense the Fina Marks with respect to the licensed products listed
on Exhibit A (such products being referred to herein as “Licensed Products”) in the Licensed
Territory. The Fina Marks, together with any other trademark or trade dress used by Alon,
collectively constitute the “Fina Brand and Image.”



     B. Alon and Brands desire to provide for Brands’ purchase from Alon of the Licensed Products
for resale by Brands, all in accordance with the terms and provisions of this Agreement.



     C. Brands operates the FinaNet credit card program (the “Credit Card Program”) and from time
to time conducts a variety of marketing support activities (the “Marketing Services”).



     D. Brands desires to (a) sell the Licensed Products under the Fina Marks, (b) use the Fina
Marks in connection with Brands’ Credit Card Program and Marketing Services, and (c) sublicense
the use of the Fina Marks within the Licensed Territory (collectively, “Brands’ Fina-Branded
Marketing”).



     E. This Agreement covers (a) the sale by Alon, and the purchase by Brands, of the Licensed
Products, and (b) the license of the Fina Marks by Alon to Brands for (i) use of the Fina Marks in
connection with the sale of the Licensed Products within the Licensed Territory, (ii) use of the
Fina Marks in connection with the Credit Card Program, (iii) use of the Fina Marks in







2









 




connection with the Marketing Services, and (iv) use of the Fina Marks in connection with
sublicensing the use of the Fina Marks within the Licensed Territory.




     F. Each exhibit attached to this Agreement is incorporated in this Agreement for all purposes.



     NOW, THEREFORE, Alon and Brands agree as follows:




	1.	 	Products






	 	 	Alon will provide Brands with products which meet or exceed the most current
specification applicable to the markets in which the product terminals serve including
but not limited to:






	 	 	HRVP, LRVP, Ethanol blended, Unleaded and Premium grades of gasoline






	 	 	Ultra low sulfur diesel fuel






	2.	 	Supply 





     The “stated quantity” shall be equal to 276,000,000 gallons per year total of the above listed
products, forecasted by terminal on a monthly basis in accordance with the format set forth on
Exhibit B. Brands agrees to purchase no less than 80% of stated quantity and no more than 120% of
stated quantity ratably on a monthly basis unless otherwise agreed to by both Brands and Alon.
Should Brands purchase less than 80% of the approved contract volume for more than three
consecutive months, Alon may terminate this agreement.




	3.	 	Price





     The price to be paid by Brands to Alon for each gallon of product shall be Alon’s price for
such grade and specification of product in effect on the date of product delivery. Alon’s prices
for all delivery points shall be equal [***].



     Alon will have the right to require, approve, inject or reject the injection of certain
generic additives, including without limitation, corrosion inhibitor, lubricity, conductivity,
Texas Low Emission Diesel (TxLED) additive, gasoline additives, butane, pour point suppressant,
mercaptan sulfur, Fuel System Icing Inhibitor (FSII), static dissipater, generic dyes, oxygenates
and denaturants (collectively, “Additives”) to the extent that such Additives are required by law
or deemed necessary to protect Alon’s terminal equipment or are consistent with industry standards.



     [***]



     Tax incentives related to the use of reformulated fuels such as the current ethanol blender’s
credit of $.46 per gallon will be [***]. The Parties recognize that industry practices regarding
the allocation of a blender’s credit and RINS are recent arrivals to the motor fuel




 





	 	[***]	 	Text omitted pursuant to a request for confidential treatment and
filed separately with the Securities and Exchange Commission.




3









 




marketing industry. As industry practices evolve, it is the intention of the Parties that the
provisions set forth in this paragraph will evolve to conform to the then-current industry
standards.





	4.	 	Terms of Payment





     Terms of payment shall be governed by Alon’s General Terms and Conditions in effect on the
date hereof. Unless otherwise specified, payment terms will be NET 10 days.




	5.	 	Terms of Shipment





     FOB terminals used by Alon listed in Exhibit B. Shipment of Products shall be in quantities
and by method of shipment as authorized at the terminal from which shipments are made.




	6.	 	Trademark






	 	6.1	 	License Grant





            6.1.1 Subject to the terms and provisions of this Agreement, Alon grants Brands an exclusive,
non-transferable, license to:




	 	(a)	 	use the Fina Marks in connection with the Licensed Products offered for
sale in retail transactions at stations now owned or operated by Brands or those
stations that may in the future be owned or operated by Brands within the Licensed
Territory (“Owned Stations”);
	 
	 	(b)	 	use the Fina Marks in promoting sales of Licensed Products at Owned
Stations (including use of the Fina Marks in connection with the Credit Card
Program);
	 
	 	(c)	 	use the Fina Marks in connection with the Licensed Products purchased
from Brands for resale by dealers or other distributors within the Licensed
Territory (“Permitted Dealers”) at certain retail stations within the Licensed
Territory (“Dealer Stations”);
	 
	 	(d)	 	use the Fina Marks in promoting sales of Licensed Products at Dealer
Stations (including use of the Fina Marks in connection with the Credit Card
Program); and
	 
	 	(e)	 	use the Fina Marks in sublicensing arrangements with distributors or
dealers within the Licensed Territory.





            6.1.2 References in this Agreement to the licensed “use” of the Fina Marks by Brands shall
mean the sales, promotion and other activities set out in subsections (a) — (e) above.



            6.1.3 Brands will comply with all applicable laws, including without limitation, the Petroleum
Marketing Practices Act (as hereinafter defined) in terminating the status of any Owned Station or
Dealer Station.



4









 





            6.1.4 Brands shall have the right to sell products other than the Licensed Products
(“Unlicensed Products”) such as grocery or convenience store items at its Owned Stations, and to
sell Unlicensed Products for retail resale at Dealer Stations.




	 	6.2	 	Rights of Alon and Primary Licensors; Limited Warranty





            6.2.1 Brands acknowledges that the Fina Marks, whether registered under federal or state law
or unregistered, are owned solely by and are the exclusive property of the Primary Licensors, are
valuable and important property of the Primary Licensors, and are essential to the goodwill and
reputation developed by the Primary Licensors and Alon. Brands further acknowledges that the Fina
Brand and Image, which includes the Fina Marks, are owned solely by and are the exclusive property
of the Primary Licensors, are valuable and important property of the Primary Licensors and Alon,
and are essential to the goodwill and reputation developed by the Primary Licensors and Alon.
Brands acknowledges and agrees that no title to the Fina Marks or the Fina Brand and Image will
pass hereunder to or thereafter through or from Brands, and only the limited rights granted in or
pursuant to this Agreement are provided to Brands.



            6.2.2 Brands shall permit Primary Licensors and Alon to inspect Covered Stations and other
facilities used by Brands or a Permitted Dealer in connection with its operations under this
Agreement at any reasonable time for compliance with the requirements of this Agreement. Brands
shall, and shall cause each Permitted Dealer to, cooperate fully with Primary Licensors and Alon in
such inspections and in any follow-up investigation that Primary Licensors or Alon deems
appropriate, including but not limited to investigations to determine if any of the Fina Marks have
been infringed or to determine if a breach of any of Brands’ obligations under this Agreement has
occurred.



            6.2.3 Brands acknowledges and agrees that any usage of the Fina Marks and the Fina Brand and
Image by Brands, its Permitted Dealers or anyone on Brands’ behalf pursuant to this Agreement (or
otherwise, even if such action is a breach of this Agreement) will inure to the benefit of Primary
Licensors and Alon.



            6.2.4 Alon warrants that the Master License Agreement is in effect as of the Effective Date
and that Alon has taken all requisite action to authorize the making of this Agreement under its
organizational documents. Alon makes no other representation or warranty, express or implied,
regarding this Agreement or its subject matter, including but not limited to any warranty as to the
validity of any Fina Mark, any warranty of suitability or merchantability, any warranty as to
Alon’s rights or powers under the master license agreement, or any representation or warranty as
to Brands’ future operating performance or results while using the Fina Marks or the Fina brand and
image.



            6.2.5 Brands acknowledges that the Master License Agreement will expire in accordance with its
terms in the year 2012. In the event that the Master License Agreement is not extended by Alon,
Alon may provide an alternative to the Fina Brand and Image and/or either party may terminate the
sublicense granted herein.


5









 






	7.	 	Term





     This Agreement will be in force and effect from the date on which Brands’ Registration
Statement on Form S-1, registering certain equity securities of Brands pursuant to the Securities
Act of 1933, as amended, is declared effective by the Securities and Exchange Commission (the
“Effective Date”) and shall continue until December 31, 2029.




	8.	 	[***]





     [***].




	9.	 	Assignability





     Brands shall not sell, assign or dispose of Brands’ interest in this Agreement in whole or in
part, directly or indirectly, by operation of law or otherwise, without the prior written consent
of Alon, which may be withheld in Alon’s sole discretion.




	10.	 	Waiver





     Alon’s or Brands’ failure on any occasion to (a) insist on the other Party’s performance or
observance of a provision of this Agreement, or to insist on the satisfaction of any condition to
its own performance or observance of a provision of this Agreement, or (b) exercise any of its
rights or privileges under this Agreement, shall not be construed as a waiver of any such
provision, condition, right or privilege on any other occasion.




	11.	 	No Inducements or Reliance





     Each Party acknowledges that it has not been induced to enter into this Agreement by any
representations or promises of the other Party that are not specifically stated herein. More
specifically, Brands represents and acknowledges that (a) Brands has independently evaluated the
merits and risks of this Agreement and has consulted with such legal, tax, and business advisors as
Brands deemed appropriate, and (b) Brands has not relied upon Alon or its representatives for any
legal, tax or business advice or disclosure regarding this Agreement.




	12.	 	Entire Agreement





     Subject to the immediately following sentence, this Agreement (and the schedules and exhibits
hereto) constitutes the entire agreement between Alon and Brands regarding the purchase and sale of
Licensed Products, the use of the Fina Marks and the Fina Brand and Image and supersedes any prior
agreements between the parties relating to the purchase and sale of petroleum products or the use
of the Fina Marks and the Fina Brand and Image. Except when this Agreement expressly provides that
a Party may amend or modify a specific provision of this Agreement unilaterally, no amendment or
modification of this Agreement shall be binding on either Party unless made in writing and signed
by an authorized representative of each Party. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, the remainder hereof will not be affected thereby.




 





	 	[***]	 	Text omitted pursuant to a request for confidential treatment and
filed separately with the Securities and Exchange Commission.





6









 






	13.	 	Acceptance





     This Agreement and any amendment or modification hereof shall be binding on the Parties only
upon due execution by each Party. Commencement of performance under this Agreement by either Party
before such execution shall not be deemed or construed as a waiver by Alon of this requirement.




	14.	 	Notices





     Notices required under the terms of this Agreement shall be deemed to have been properly given
when such notice is (a) personally delivered, (b) deposited in the United States mail, first class
postage prepaid, (c) deposited with a commercial overnight express delivery service, or (c)
delivered by facsimile addressed to Alon and Brands at their respective addresses for notice
specified below. Either Party may substitute a different address by giving written notice thereof
to the other Party. The date of service of a notice served by mail shall be deemed to be the date
on which the notice is deposited in the United States mail.



	 	 	 
	Alon USA, LP

	 	Alon Brands, Inc.
	7616 LBJ Freeway, Suite 300

	 	7616 LBJ Freeway, Third Floor
	Dallas, Texas 75251

	 	Dallas, Texas 75251
	Attention: General Counsel

	 	Attention: Chief Financial Officer
	(972) 367-3724

	 	(972) 367-3757







	15.	 	Attorney’s Fees





     If either party breaches any material obligation under this Agreement and fails to cure the
breach within the time permitted (if any), and if the non-breaching party employs an attorney to
enforce or defend any of its rights or remedies hereunder, the breaching party shall pay all
reasonable legal costs and expenses, including but not limited to attorneys’ fees, incurred by the
non-breaching party in connection therewith.




	16.	 	Headings





     The headings contained in this Agreement are for reference only and shall have no effect on
its meaning or interpretation.




	17.	 	Successors





     This Agreement shall inure to the benefit of and be binding upon the Parties hereto, their
heirs, representatives, successors, and assigns; subject, however, to the limitations of Section 9
above. In the event that Alon for any reason ceases to own, directly or indirectly, a majority of
the outstanding shares of common stock, or equivalent equity ownership, of Brands, Alon may, at its
option, terminate this Agreement.




	18.	 	Limitation of Liability





     In no event shall Alon be liable to Brands, or to any third party claiming by, through or
under Brands, including without limitation, any Permitted Dealer, for any special, consequential,
incidental or indirect damages of any 


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kind (including, without limitation, loss of profits), however caused and based on
whatever theory of liability, whether tort, contract, strict liability, negligence or otherwise,
arising out of or related to this Agreement.





	19.	 	Remedies





     In the event that Brands is in default of its obligations under this Agreement, other than an
obligation to make payment, Alon’s sole remedy shall be the termination of this Agreement.




	20.	 	No Third Party Beneficiaries





     Except for the Primary Licensors, this Agreement is not intended to, and shall not, create any
rights in or under any benefits upon any person other than the parties hereto. 



[This space intentionally left blank]





8









 








     Executed to be effective as of the Effective Date.



	 	 	 	 	 	 	 
	ALON USA, LP	 	ALON BRANDS, INC.
	By:

	 	Alon USA GP, LLC	 	 	 	 
	Its:

	 	General Partner	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Jeff Morris
	 	By:
	 	/s/ Judge Dobrient
	 

	 	 
	 	 	 	 
	 

	 	Name: Jeff Morris
	 	 	 	Name: Judge Dobrient
	 

	 	Title: President and Chief Executive Officer
	 	 	 	Title: SVP-Wholesale Marketing











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Exhibit A




	 	 	 	 	 	 	 
	us	 	 	 	 
	registration	 	 	 	 
	number	 	mark	 	licensed products
	 
	 	673,746	 	 	FINA

	 	Gasoline and Diesel
	 	674,437	 	 	FINA (with Shield Design)

	 	Gasoline and Diesel
	 	1,642,553	 	 	Design (Blocks)

	 	Gasoline and Diesel
	 	1,644,206	 	 	Design (Blocks)

	 	Gasoline and Diesel
	 	1,649,241	 	 	Design (Blocks)

	 	Gasoline and Diesel
	 	 	 	 	 
	 	 
	 	1,846,444	 	 	Design (Shield)

	 	Gasoline and Diesel
	 	1,851,264	 	 	Design (Shield)

	 	Gasoline and Diesel
	 	2,035,043	 	 	FINA (with Shield Design)

	 	Gasoline and Diesel
	 	2,090,557	 	 	FINA (with Design)

	 	Gasoline and Diesel
	 	2,098,703	 	 	FINA (with Design)

	 	Gasoline and Diesel
	 	2,206,838	 	 	THE FORMULA FOR THE FUTURE

	 	Gasoline and Diesel
	 	2,297,985	 	 	PERFORMANCE FOR A LIFETIME

	 	Gasoline and Diesel





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Exhibit B




PRODUCTS PRICING* SUMMARY BY LOCATION



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Forecasted	 	 
	 	 	 	 	 	 	 	 	 	 	Gasoline	 	Forecasted
	Market	 	Basis	 	[***]	 	[***]	[***]	gpm	 	Diesel gpm
	 
	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]
	 	[***]
	 	[***]
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	 	[***]
	 	[***]
	[***]
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	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]
	 	[***]
	 	[***]
	 	[***]
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	[***]
	 	[***]
	 	[***]
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	 	[***]
	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
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	 	[***]
	[***]
	 	[***]
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	 	[***]
	 	[***]
	 	[***]
	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]
	 	[***]
	 	[***]
	 	[***]
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	 	[***]
	 	[***]
	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	Total
	 	 	 	 	 	 	 	 	 	[***]
	 	[***]





[***]





	1.	 	Volume Forecast by Terminal






     Brands shall provide Alon with an estimated volume forecast by terminal on a monthly basis.
Forecasts shall be submitted to Alon [***] days in advance of terminal product lifting.




	2.	 	[***]






 





	 	[***]	 	Text omitted pursuant to a request for confidential treatment and
filed separately with the Securities and Exchange Commission.





11